Thursday, July 5, 2012

Morning Market Analysis; BRICs Signaling Turnaround?

The Brazil ETF bottomed in the second half of May and has been trading in the 50-53 price range since.  However, notice the increase in both the MACD (signaling an increase in momentum) and CMF (indicating an inbound flow of money).  The 10 and 20 day EMAs are now moving more sideways than down, indicating the overall trend has at least turned neutral.  Prices are right below the 50 day EMA.  A move through the 54 price level would signal a change of overall trend.

The Russian ETF has many of the same characteristics as the Brazilian ETF, but here prices have moved through resistance a bit above the 26 price level.  In addition, the 10 day EMA has crossed above the 20 day EMA and prices are above the 50 day EMA.  There is resistance at the 28 price level (from levels established in early May).

Building on the advancement of the Russian market, the Indian market is just a but further along in its rally, with prices firmly about the 50 day EMA and approaching the 200 day EMA.  The shorter EMAs are now approaching the 50 day EMA.  Prices are in the middle of the Fibonacci retracement levels where they typically get caught in some type of resistance.

The Chinese chart is more closely aligned with the Brazilian chart; prices here have yet to make a big break-out. 

Two of the emerging economies stock markets (Russia and India) have emerged from their bottom and are now rallying higher.  Two others (Brazil and China) are close to moving through resistance.  This is welcome news in the overall picture.